According to the RBI norms, banks having a shortfall on lending to agriculture under the priority sector are required to contribute the sum equivalent to the shortfall to a ceiling of 1.5 per cent of net bank credit (NBC) to the RIDF during the subsequent year.

While the UTI Bank at Rs 324.83 crore has topped the list of the private sector banks which have fallen short in their priority sector lending target in 1997-98, Centurion Bank had incurred the largest amount, Rs 105 crore during 1996-97. Centurion Bank was also asked to deposit Rs 100.77 crore during 1997-98. The other bankswhich have been asked to deposit are ICICI Banking Corporation (Rs22.19 crore) and IDBI Bank (Rs 26.74 crore), Bank of Rajasthan (Rs 42.27 crore), Ratnakar Bank (Rs 9.69 crore).

It is observed that the priority sector as well as agricultural advances of both public sector and private sector banks have shown increase in absolute terms during the last three years.

With a view to step up the flow of credit to agriculture, the disbursement to agriculture by public sector banks is monitored through special agricultural credit plans formulated by the banks as a result of which disbursements have risen from Rs 8,255.66 crore during 1995-96 to Rs 14,803.02 crore during 1997-98. The projected disbursements for agriculture during the year 1998-99 is Rs 18,369 crore.

According to the RBI, both public and private sector banks have achieved the priority-sector lending target of 40 per cent of the net bank credit as at the end of March, 1997 and March, 1998. As regards lending to agriculture, there has beensubstantial expansion in absolute terms amounts during the period.

The corpus of RIDF-I was contributed by both public sector and private sector domestic banks which had not achieved the agriculture lending sub-target of 18 per cent of the net bank credit as on the last Friday of December, 1994 and March, 1994 respectively.

The amounts allocated to banks was on a pro-rata basis depending on the shortfall of each bank subject to a maximum of 1.5 per cent of NBC.In the case of RIDF-II, however, the corpus of Rs 2,500 crore was required to be contributed by public sector banks having a shortfall in the priority sector target of 40 per cent of NBC as on the last reporting Friday of March, 1996.

The corpus of RIDF-III (Rs 2,500 crore) was required to be contributed by both public and private sector banks to the extent of the entire shortfall in their priority sector lending, 40 per cent as on the last reporting Friday of March, 1997.

The balance amount was to be contributed by public sector banks which hadnot achieved the agriculture lending target of 18 per cent as on that date on a pro-rata basis.

As regards RIDF-IV set up during the current year, both public and private sector banks which have not achieved the total priority sector target of 40 per cent of the NBC as on the last reporting Friday of March, 1998, have already been asked to contribute the entire shortfall to the corpus of the fund.